Digital TransformationRetailThree retailers going above and beyond with personalization

Three retailers going above and beyond with personalization

Personalization is important for any retailer and some - like Nike, L'Oréal and Stitch Fix - are using innovative technology to do it better than others.

Three years ago, researchers from Stanford and the University of Chicago teamed up with a company that sells tax prep software for accounting students, and sent more than 68,000 emails. Half had the recipient’s first names in the subject line; they had a 20% higher open rate. And as far as personalization goes, that’s the lowest-possible hanging fruit.

Mailchimp is geared toward small businesses, which don’t always have much marketing savvy or the resources to acquire it. And yet, for Mailchimp users, personalizing a subject line is as simple as pasting *|FNAME|*. With all the advances in technology, and the money to capitalize on them, think about how much more large retailers are capable of.

Here are three particularly innovative examples:

L’Oréal: Going beyond personalization in marketing into personalized products

Personalization- L'Oreal DOSE

Personalization is especially important for beauty retailers. Why? Every product is inherently personalized. By design, they look different on each consumer, depending on their unique combination of skin tone, complexion, face shape, bone structure, and hair and eye color. With augmented reality, brands like Sephora and Covergirl allow shoppers to virtually try on cosmetics to see how they’ll look on their faces, rather than those of the models.

SkinCeuticals, a skincare brand owned by L’Oréal took that even further with D.O.S.E, which creates serums customized for each consumer’s skin. Aided by a dermatologist, users fill out a questionnaire about their needs and preferences, ultimately deciding on a personalized formula. That information is then transmitted to the D.O.S.E machine, which contains 24 canisters of active ingredients, precisely doled out one drip at a time. The machine also contains a production-quality compounder that operates at 1,200 rotations per minute. The end result is a tailor-made serum, the likes of which previously didn’t exist outside of a laboratory.

L’Oréal’s Technology Incubator developed D.O.S.E and launched it at SXSW last year. It is currently available at 35 dermatologists’ and plastic surgeons’ offices throughout the U.S.

Nike: Diminishing returns with augmented reality

Personalization - Nike's size app

With the NIKEiD customization service, Nike has been at the forefront of personalization for years. The strategy helps retailers increase revenue — and Nike hopes it helps them keep revenue, too. The sportswear giant estimates that 27% of shoes purchased online are returned due sizing issues, about which the company giant receives more than 500,000 complaints each year.

Last week, Nike announced Nike Fit, an augmented reality app that helps consumers determine their true shoe sizes. Point your smartphone camera at your feet and Nike Fit scans them. However, the process is far more sophisticated than simply placing an AR shoe on your foot. Launching in July, the app measures morphology, collecting 13 data points through a combination of computer vision, data science, machine learning, artificial intelligence and recommendation algorithms.

Accurate within two millimeters, the measurement helps Nike recommend the right shoe. It’s also available in guest mode for gift-givers.

Stitch Fix: Turning product recommendations into a game

Personalization - Stitch Fix's Style Shuffle

According to Salesforce research from 2017, clicks on personalized product recommendations drive just 7% of ecommerce visits… and 26% of revenue. They’re clearly crucial for any retailer, but there are product recommendations and then there’s Style Shuffle.

A new feature from Stitch Fix, Style Shuffle combines product recommendations and the mindless, but addicting, swiping of dating apps. Stitch Fix shows shoppers outfits or individual articles of clothing and asks, “Is this your style?” Giving it a thumbs up or down ultimately gives Stitch Fix a ton of valuable data. Algorithms map preferences, creating sophisticated profiles of customers not unlike those on Netflix.

Personalization has been a core tenet of Stitch Fix’s business from the beginning, curating subscription boxes based on detailed questionnaires, assisted by algorithms. Style Shuffle has essentially gamified this process; more than three-quarters of users have played since it launched last year.

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